Take a look at the blue highlighted zone that I have drawn on the 60-minute chart below. I am featuring this zone on today’s DAX analysis because of the number of touches it has had. The zone I marked out is an area between 13,250 to 13,285. Whilst this zone has had many previous touches, notice how this morning it also received another touch.
As the European session opened, the market rallied towards that zone however, the market reacted by rejecting higher prices and we saw further responsive selling. The German DAX remains inside the monthly composite value area, which you can see on the profile to the left. The trend remains directionless for now but I still favour a move to the upside.
25-11-2019 10-minute DAX Analysis
I have drawn a red zone on this chart between 13,035 and 13,240. This zone was a previous gap from Thursday. If you look to the right you will see how price action tagged that zone from below and then tagged that zone from above. But if you also take that zone left, you’ll notice that it was a previous support area as well. There certainly seems to be some demand in this zone.
As I write this article we are about to test the gap from the overnight session. A gap close would be around about 13,175. I would like to see that level hold and the market begin to build from there as we’ve started forming a short term bullish trend. The trend to which I refer begins from Thursdays double bottom. I have marked that out using the blue swing markers.
25-11-2019 DAX Key Levels
The chart below clearly shows this morning’s gap. When the market cuts into a gap, the first target should be the 50% point. You cannot always assume that the market will close the gap. All too often people get trapped in that situation. They jump into a short assuming that the market will close the gap, but as the market turns around it traps them. If the gap does close, then the point of control and pivot are only a few points below, and would be obvious targets.
| Method | Price |
| VWAP | 13169 |
| Point of Control | 13172 |
| Value Area High | 13182 |
| Value Area Low | 13148 |
| Pivot | 13177 |
| R2 | 13305 |
| S2 | 13049 |
25-11-2019 DAX Market Profile
Friday’s initial balance was higher than Thursday’s initial balance. Friday’s value area formed inside of the initial balance. The point of control and Friday‘s close were also inside the value area. Friday‘s low held Thursday’s value area low. All of these combinations still point to a bullish market for now.
25-11-2019 DAX Analysis Video
Watch the video from the webinar this morning. Towards the end of the video, and the strategy chart, I began to draw an ACR line set. Notice how the market tact the reaction point? Once more, a nice example of how to use this technical tool on the DAX. Come and join the twitch channel to watch the webinars in the morning.
Market News
Focus continues to be on US-China trade talks and the tentative signs of a bottoming in the global business cycle. Today, the German IFOindex will provide more clues to the state of the euro area economy. A rise in manufacturing PMI new orders on Friday points to some upside risk to the ifo expectations index. Overall we expect the euro business cycle to stay soft in the short term but a gradual recovery in early 2020.
Over the coming week, the main indicators to watch will be the core durable goods orders and inflation data out of both the US and the euro area.
Find an economic calendar on the live DAX chart.
